Rad & D'Aprile Inc. v. Arnell Constr. Corp.
| Citation | 49 Misc.3d 189,2015 N.Y. Slip Op. 25191,12 N.Y.S.3d 812 |
| Decision Date | 05 June 2015 |
| Docket Number | 502464/2014 |
| Parties | RAD AND D'APRILE INC. a/k/a Rad & D'Aprile Inc., Plaintiff, v. ARNELL CONSTRUCTION CORP., Defendant. |
| Court | United States State Supreme Court (New York) |
Jose A. Aquino, Esq., Duane Morris LLP, New York, for Plaintiff.
Jeffrey I. Scott, Esq., Goldberg & Connolly, Rockville Centre, for Defendant.
In this action by plaintiff RAD and D'Aprile Inc. a/k/a RAD & D'Aprile Inc. (plaintiff) against defendant Arnell Construction Corp. (defendant), defendant moves, under motion sequence number one, for an order: (1) pursuant to CPLR 3211(a)(7), (a)(5), and (a)(1), dismissing plaintiff's verified complaint, with prejudice, on the grounds that the complaint fails to state a cause of action, plaintiff has failed to present its claims within the statutorily mandated time periods, and it has a defense based upon the documentary evidence, and (2) awarding attorneys' fees and costs to it pursuant to 22 NYCRR 130–1.1.
On June 22, 2001, the City of New York (the City), acting by and through the New York City Department of Sanitation (the DOS), awarded a public improvement construction contract (the prime contract) to defendant, a general contractor, whereby it agreed to provide general construction services to build two new sanitation garages for Districts 1 and 4 located at 161 Varick Street, in Brooklyn, New York (the project). In furtherance of the prime contract, defendant, on August 22, 2001, entered into a subcontract with plaintiff, a masonry subcontractor, to perform certain masonry work (the subcontract).
Paragraph 15 of the subcontract, in pertinent part, provided:
The Subcontractor hereby agrees that no work shall be considered as extra hereunder unless, before said work shall have been done, a separate written estimate therefor shall have been submitted to the Contractor in the same manner as is provided in the Principal Agreement. If the Contractor and/or the Owner refuses to approve the estimate for extra work, the Subcontractor shall nevertheless perform expeditiously the work called for, and in that event, should the Owner refuse to give such approval, if the Subcontractor so desires, the Contractor shall institute suit on behalf of the Subcontractor for compensation for such work providing that any and all suit fees and reasonable attorney's fees arising for such suit shall be borne by the Subcontractor. This clause in no way obligates the Contractor to pay the Subcontractor's claim for extra work unless such work was first approved by the Owner....
The bid documents indicated that work on the project was to be completed by defendant within a period of 42 months. Plaintiff's masonry work was to be completed by October 21, 2003, a period of 14.5 months, well before the completion of the entire project. Pursuant to the DOS-issued notice to proceed, work on the project was to commence on November 1, 2001. However, due to various delays and interferences impacting the project, plaintiff was allegedly wrongfully denied access to the project site and otherwise prevented from, hindered, and delayed in commencing and performing its work within the scheduled 14.5 months. Plaintiff was unable to commence its masonry work on the project until November 11, 2003, and was unable to complete its work until over two years after the scheduled completion date. Specifically, plaintiff's final payment applications were for the period through September 30, 2005. Plaintiff claims that, as a result, it incurred extra and additional costs due to, among other things, a late start, denial of access to the project site, revisions to the construction sequence, stop work orders, extra work, contaminated and hazardous soils, and changed conditions.
Plaintiff, by various notices dated February 1, 2002 through August 29, 2005, informed defendant of the delays, impediments, and interferences that caused it to incur extra and additional work, costs, and losses.
In or about May 2002, plaintiff hired an outside claims consultant, Bethay Consultants Inc. (Bethay), to assist it in preparing a claim for the extra and additional work, costs, and losses arising from the aforementioned delays, impediments, and interferences, so that defendant could submit this claim to the City, pursuant to paragraph 15 of the subcontract. By letter dated June 4, 2002, and a second identical letter dated July 25, 2002, plaintiff complained to defendant that increases in its compensation under the subcontract were necessary due to the delays encountered. By letter dated August 9, 2002, defendant responded as follows:
Plaintiff asserts that since, in consideration for plaintiff's agreement to defer its claims against defendant, defendant agreed to incorporate plaintiff's claims into its own claim against the City and advance $100,000 against any amounts recovered from the City on its pass-through claims, plaintiff did not pursue its claims against defendant. Plaintiff continued, however, to give defendant notice of the delays, impediments, and interferences resulting in extra and additional work, costs, and losses. By letter dated August 20, 2004, plaintiff informed defendant that, because the costs of its materials were increasing rapidly, it would be billing for increases in costs. By letter dated August 23, 2004, defendant responded, “whatever information you provide for said increases must become part of our claim against the owner for these added costs.”
On September 2, 2005, Bethay (which had also been retained by defendant as its claims consultant) finalized plaintiff's claims for additional compensation and gave them to plaintiff for review and approval, advising it to submit them to defendant and to request that defendant submit these claims to the DOS on its behalf as soon as possible. By letter dated September 8, 2005, plaintiff submitted its claims for additional compensation to defendant, and requested that it submit these claims to the DOS on its behalf as soon as possible.
After reviewing plaintiff's claims, Barry Aronowitz, defendant's project manager, requested, on September 15, 2005, that plaintiff make modifications to that portion of its claim which related to certain steel problems since it could potentially negatively impact defendant's claims, and, in further consideration of defendant's assuming the obligation to submit plaintiff's claims to the owner, plaintiff agreed to drop that part of its claim. Mr. Aronowitz also requested that plaintiff revise a schedule of its claim regarding loss of productivity, and plaintiff revised its claim, as requested, and resubmitted it to defendant on October 31, 2005. According to plaintiff, it was informed that, in January 2006, defendant submitted its own claims, which incorporated plaintiff's claims and those of other subcontractors, to the City.
Thereafter, Andrew Feldman, the president of plaintiff, periodically spoke to Mr. Aronowitz and Harold Zarember, the president of defendant, to inquire as to the status of its claims. Mr. Feldman claims that Mr. Aronowitz informed him that plaintiff would be hearing something regarding its claims shortly and that no further action was necessary.
By letter dated December 23, 2008, Bethay advised plaintiff that defendant had retained an attorney to pursue the claims, Henry Goldberg, Esq., who wanted a new claims consultant, Jack Menco, to become involved with the claims, and that this would probably take considerable time. Bethay further advised plaintiff, in this letter, that it was already over a year since substantial completion was reached, and that it could not offer any further information as to when defendant would be submitting the claims. At the request of Mr. Aronowitz, plaintiff forwarded a copy of its delay claims to Mr. Menco on December 30, 2008.
On August 11, 2010, defendant filed a verified notice of claim against the City, alleging the various delays and interferences by the DOS and the City resulting in extra work, incorporating plaintiff's claims in the amount of $2,099,192. On December 13, 2010, defendant commenced an action against the City and the DOS in the Supreme Court, New York County (Arnell Constr. Corp. v. City of New York, Sup.Ct., N.Y. County, index No. 651491/2010) (the New York County action), seeking $15,092,471.40 on its own behalf and on behalf of plaintiff and other subcontractors, alleging the delays, interferences, and extra work on the project.
By a decision and order dated May 7, 2012 in the New York County action, Justice Eileen Bransten denied a motion by defendant (which was the plaintiff in the New York County action) for partial summary judgment, denied a cross-motion by defendants to dismiss the City and the DOS' affirmative defenses that defendant's claims were time-barred, and granted a cross-motion by the City and the DOS to dismiss defendant's complaint as time-barred. Justice Bransten held that article 56 of the prime contract established a statute of limitations period for claims against the City and the DOS requiring such claims to be commenced within six months after the date the Commissioner issued a certificate of substantial completion. She found that defendant had substantially completed its work on December 7, 2007, and that this six-month period was triggered on December 27, 2007, when the City forwarded to defendant notice of substantial completion, requiring it to bring its claims...
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Rad & D'Aprile, Inc. v. Arnell Constr. Corp.
...Arnell filed a motion to dismiss Rad's complaint. By a decision and order dated June 5, 2015 (RAD & D'Aprile Inc. v Arnell Constr. Corp., 49 Misc 3d 189 [Sup Ct, Kings County 2015], affd sub nom. Rad & D'Aprile, Inc. v Arnell Constr. Corp., 159 AD3d 971 [2d Dept 2018]), now retired Justice ......